April 30, 2018 / 10:53 AM / 4 months ago

Troubled UK retailer Carpetright sees 2018 loss of 7-9 million pounds

(Reuters) - British retailer Carpetright (CPRC.L) said on Monday it expects to post a pretax loss of 7 million pounds ($9.6 million) to 9 million pounds in 2018, hurt by continued weakness in consumer confidence in its home market.

FILE PHOTO: A sign hangs above the door of a Carpetright store in Derby, Britain January 19, 2018. REUTERS/Darren Staples/File Photo

Shares in Carpetright, which have lost more than 80 percent of their value over the last year following a series of profit warnings, were down nearly 6 percent by 1037 GMT.

The floor coverings retailer also said its shareholders approved its proposed restructuring plan at a meeting, following approval from creditors and landlords on Thursday.

Carpetright said this month it would seek creditor approval for a Company Voluntary Arrangement (CVA) plan, which involves the closure of 92 stores and rent reductions at 113 others, putting 300 jobs at risk.

“Having now received approval(s)..., we will press ahead with our plans for the proposed equity financing to recapitalize the business and enable Carpetright to address the competitive threat from a position of strength,” Chief Executive Wilf Walsh said.

Carpetright wants to raise 60 million pounds ($83.5 million) through an equity issue to reduce its indebtedness and fund the restructuring plan.

With UK consumer spending under pressure, Carpetright, which trades from 409 shops across Britain, is not alone in finding the going tough.

Like-for-like (LFL) sales in the UK fell by 10.5 percent in the fourth quarter, resulting in a 3.6 percent decline in full-year comparable sales for the market, the company said.

Carpetright said LFL sales in the rest of Europe (RoE) fell by 8.3 percent in the final quarter, leading to a 1.1 percent rise for the year, “against a similar trading background to that experienced in the UK”.

Already this year Toys R Us UK, electricals group Maplin and drinks wholesaler Conviviality have plunged into administration, while fashion retailer New Look is also closing stores.

($1 = 0.7281 pounds)

Reporting by Justin George Varghese in Bengaluru; editing by Jason Neely/David Evans

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